DT Posts Record Nine-Month Loss, Appoints Ricke CEO

Communications Today, Nov 15, 2002

Deutsche Telekom AG [DT] Thursday reported a loss of 24.5 billion euros ($24.6 billion) for the first nine months this year compared to a loss of 1 billion euros ($1.01 billion) for the same period a year ago. The loss, which is the largest in German history, was mostly due to write-downs of wireless assets and licenses. Adjusted for one-time items, the company posted a nine-month loss of 4.2 billion euros ($4.23 billion) compared with 2.8 billion euros ($2.82 billion) a year ago. In order to pay down its staggering debt load, DT plans to reduce 2003 capital expenditures to between 6.7 billion euros ($6.75 billion) and 7.7 billion euros ($7.75 billion) as well as to scrap its 2002 dividend and sell non-core assets.

The company appointed Kai-Uwe Ricke, the head of its mobile operation, as its new CEO. The position had been vacant since the ouster of former CEO Ron Sommer in July. In his introductory news conference, Ricke said he didn't see a need to sell T-Mobile USA to cut debt, but that he is open to a merger of the U.S. unit at the right price. In August, DT posted a loss for the first six months of 2002 at 3.9 billion euros ($3.92 billion) compared to a loss of 349 million euros ($351.5 million) for the same period a year ago.

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